Encyclopedia of Investment Terminology

Stock Split

A stock split increases the number of shares for each investor, most commonly, on a 2 for 1 basis. For example, if an investor has 150 shares, after a 2 for 1 split, they will end up with 300 shares, which will usually begin trading at half the price. When the stock split,s its value will be altered according to the groupís market capitalization. This is generally a sign of stock in a company being popular.